This article describes an approach to the measurement of the change in the quality of the consumer's basket, based on shifts in the basket composition toward and away from luxury goods and necessities. One of the results is that the income elasticity of the demand for quality appears to be equal to a weighted variance of the income elasticities of the individual goods and services. The discussion includes an application to the annual changes in the Dutch consumer's basket from 1922 to 1963 as well as an analysis of the decomposition of quality change between and within commodity groups.
This is a preview of subscription content, log in to check access.
Buy single article
Instant access to the full article PDF.
Price includes VAT for USA
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
This is the net price. Taxes to be calculated in checkout.
Barten, A. P., ‘Het verbruik door gezinshuishoudingen in Nederland, 1921–1939 en 1948–1962,’ Report 6604 of the Econometric Institute of the Netherlands School of Economics, Rotterdam, 1966.
Barten, A. P.,Theorie en empirie van een volledig stelsel van vraagvergelijkingen, Doctoral dissertation, Netherlands School of Economics, Rotterdam, 1966.
Barten, A. P., ‘Estimating Demand Equations,’Econometrica, XXXVI (1968), pp. 213–251.
Brooks, R. B.,Diagonalizing the Hessian Matrix of the Consumer's Utility Function, Doctoral dissertation, The University of Chicago, 1970.
Cramer, J. S., ‘Een prijsindex van nieuwe personenauto's, 1950–1965,’Statistica Neerlandica, XX (1966), pp. 215–239.
Finizza, A. J.,Estimation of Demand Equations for a Subgroup of Meat Commodities, Doctoral dissertation, The University of Chicago, 1971.
Golman, S.,An Empirical Comparison of Alternative Functional Forms of Demand Systems, Doctoral dissertation, The University of Chicago, 1971.
Griliches, Z. (editor),Price Indexes and Quality Change, Cambridge: Harvard University Press, 1971.
Houthakker, H. S., ‘Compensated Changes in Quantities and Qualities Consumed,’The Review of Economic Studies, XIX (1952–53), pp. 155–164.
Nordhaus, W., andJ. Tobin,Is Growth Obsolete?, Fiftieth Anniversary Colloquium V, National Bureau of Economic Research, New York, 1972.
Paulus, J.,The Estimation of Large Systems of Consumer Demand Equations Using Stochastic Prior Information, Doctoral dissertation, The University of Chicago, 1972.
Theil, H., ‘Qualities, Prices and Budget Enquiries,’The Review of Economic Studies, XIX (1952–53), pp. 129–147.
Theil, H., ‘The Information Approach to Demand Analysis,’Econometrica, XXXVIII (1965), pp. 118–127.
Theil, H.,Economics and Information Theory, New York: American Elsevier Publishing Company, and Amsterdam: North-Holland Publishing Company, 1967.
Research supported in part by the National Science Foundation under Grant GS-30084.
About this article
Cite this article
Theil, H. Measuring the quality of the consumer's basket. De Economist 121, 333–346 (1973). https://doi.org/10.1007/BF01713161
- International Economic
- Public Finance
- Annual Change
- Weighted Variance
- Individual Good